What would it sound like on Wall Street if we got a regulator like, say, Elizabeth Warren, who is resolutely not captured by the industry she regulates?
Something like sputtering rage:
“I get disgusted every time I hear her speak. It’s like she’s sitting in some ivory tower, not understanding the ramifications of anything she says,” said Anton Schutz, president of Mendon Capital Advisors. “Any person you put in that role really ought to have some industry experience.”
Reuters gets that gem of a quote in a story today headlined “Wall Street loathing for Warren lifts regulator bid.”
Even better, it directly offsets it with a great quote explaining that worldview:
Her supporters call Warren’s critics insincere in citing a lack of “banking experience.”
“What they mean is a certain kind of ‘experience’. Traditionally bank regulators have often come from K street (lobbying) law firms working on banking law for banks,” said Travis Plunkett, legislative director of the Consumer Federation of America, who has worked with Warren for decades.
It gets another on-the-record quote:
“I don’t think she can run that new agency in a fair, balanced way where she can listen to all the constituencies, not just the consumer advocates,” said Alan Kaplinsky, a lawyer for Ballard Spahr, who advises banks and consumer financial companies.
And here’s the kicker:
A Republican aide, who was not authorized to speak on the record, said Republicans are looking for someone with more bank regulation and industry experience.
Naturally—and not necessarily in that order.
How dangerous would a Warren be to these guys’ interests? See this Barney Frank quote:
House Financial Services Chairman Barney Frank, one of her most ardent supporters, told Reuters in an interview that he wants banks to make less profit from things like overdraft fees and more from lending. “I would like to impinge on bank profits in this area,” Frank said.
Anyone who doesn’t think that bank profitability is the paramount consideration for a regulator is a blasphemer on Wall Street—and Warren’s our foremost heretic.
If she’s actually picked and confirmed (hardly an odds-on bet in an administration that picked Geithner and renominated Bernanke), this will be a fun story to cover.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.